Sunday, 8 November 2026 Weekly snapshot · Not investment advice standard-equity.report
Returns
ROTE — Return on Tangible Equity
Net income divided by tangible equity. Bank-specific.
Definition
ROTE measures profitability against tangible equity — equity minus goodwill and intangibles. For banks, it's the analytically correct profitability ratio.
Formula
Net Income ÷ (Total Equity − Goodwill − Intangibles) × 100
Why it matters
Bank ROE is distorted by acquisition goodwill, which doesn't absorb losses or generate returns in the regulatory sense. ROTE is what bank investors and regulators actually use. 12–15% ROTE is roughly the cost-of-equity hurdle for a developed-market bank.
How Standard Equity uses it
Substituted for ROIC in bank reports.
The metric
| Category | Returns |
|---|---|
| Unit | % |
| Applies to | Banks only |